CHINA and Switzerland are poised to sign a financial deal to pave the way for the establishment of an offshore Renminbi (RMB) market in Zurich.

    “A memorandum of understanding will be signed between the central banks of the two countries during Chinese Premier Li Keqiang’s visit to Switzerland,” a government official told Xinhua. “It is an important step in the internationalization of the RMB, especially in Europe.”

    Under the deal to be signed, China will give Switzerland a quota of 50 billion yuan (US$8 billion), under its Qualified Foreign Institutional Investor (QFII) scheme to support the establishment of the Zurich offshore RMB market, while the first branch of a Chinese bank will be set up in the Swiss financial hub for future RMB clearance after it gets approval from regulators of both sides.

    The QFII program kicked off in 2002 to allow foreign investment in Chinese securities using foreign currencies.

    China has established offshore RMB markets in Hong Kong and London, among other places, in a drive for the internationalization of its currency.(Xinhua)